Chevrolet is about to be "cut down" in China

Image source: Du Ge

Photo taken at the Guangzhou Auto Show in November 2023

Under the siege of domestic independent brands, it is becoming more and more difficult to do business in China, and even General Motors, which has been in China for more than 90 years, is not optimistic at present. Its century-old brand Chevrolet has become a "burden" that may be thrown away.

Recently, according to the Economic Observer, citing SAIC-GM insiders, SAIC-GM is considering a strategic adjustment to the Chevrolet brand, which may stop production of its main models in the Chinese market, Cruze and Malibu, because these models do not make money, and the overall business situation of SAIC-GM is not good.

SAIC-GM has not yet responded to this news, but it is an indisputable fact that the Chevrolet brand is under pressure in the Chinese market. Last year, Chevrolet sold about 169,000 vehicles in China, the lowest among SAIC-GM's three brands. At the same time, this figure is also a lot lower than the 200,000 units in 2022, and it is not even as good as the sales performance of a previous Cruze model.

In recent years, SAIC-GM's sales have also been "stalling", falling from 2 million units in 2017 to 1.001 million units in 2023, a direct "halving" in just five or six years. In this case, it would not be surprising that SAIC-GM did choose to streamline the Chevrolet product line.

1

Big ups and downs ●

According to the data, Chevrolet is one of the independently operated brands of the General Motors Group, which was first founded in 1911. For more than 100 years, while the GM Group brand has evolved, Chevrolet has remained its largest label. In the U.S. market, Chevrolet's status is no lower than that of Ford, claiming that every American has owned a Chevrolet, which can be called the "national god car".

When Chevrolet first entered the Chinese market, that is, in 2005, it was a good time to catch up, coinciding with the booming domestic automobile market, so it started with the first two models, and soon opened up sales in the Chinese market, completing cumulative sales of 1 million units in the first five years.

At the end of 2008, Chevrolet officially introduced its global strategic model Cruze into the Chinese market and became a popular star model, and achieved sales of more than 10,000 units in the domestic compact car market for 64 consecutive months.

Since then, Chevrolet has continued to increase sales by launching the mid-to-high-end Malibu car. According to the data, in 2014, Chevrolet's sales in China ushered in a peak, reaching 767,000 units, which was in the limelight for a while.

At that time, when General Motors released its annual data, it also praised the Cruze, because its annual sales exceeded 260,000 vehicles, which is equivalent to selling more than 20,000 vehicles every month. The Sail series and Malibu were also mentioned, with annual sales of more than 250,000 and 120,000 units, respectively.

It can be said that Chevrolet's excellent results in those years also promoted the development of SAIC-GM and the industry. In 2017, SAIC-GM reached the peak of 2 million vehicles, setting a new record for the speed of industry development, and at the same time helping the entire SAIC Group's operating performance to reach the best level in history.

It's a pity that this glory didn't last long, and the continuous decline in sales performance in recent years seems to have become the norm for Chevrolet. In 2022, its sales will be about 200,000 units, which is more than 70% lower than the peak of 2014.

According to SAIC's production and sales report, last year, SAIC-GM refreshed the "sales bottom line", down 14.45% year-on-year to 1.001 million units. The Chevrolet has the most sluggish performance, with total sales in China of only about 169,000 units, far lower than the annual sales figure of a former Cruze model.

Heading into 2024, things don't seem to be getting any better either. According to the data of Chedi, in January and February this year, the sales of the Chevrolet brand in China were 10,007 and 3,507 respectively, and it has stood on the edge of the market. The cumulative sales of SAIC-GM in the first two months of this year were 49,500 units, a sharp decline of 59.81% year-on-year.

2

Shrinking the front? ●

"Rim Visibility" has previously analyzed that there is no decline in sales for no reason, and Chevrolet's loss in the Chinese market in recent years is caused by many reasons.

From the perspective of external reasons, China's auto market is changing rapidly, and consumers' car buying preferences have also changed. When the auto market enters the stage of consumption upgrading led by trade-in, luxury cars grow against the trend, when the new energy wave hits, electric vehicles accelerate to seize the market, and when independent brands rise strongly, there are more and more supporters of domestic products. At this time, joint venture fuel vehicle brands such as Chevrolet, which take the route of parity and popularity, have naturally been impacted.

From the perspective of internal reasons, the first is the "three-cylinder engine" strategy that has been criticized. In the past few years, with the implementation of increasingly strict emission regulations in China, many car companies have launched models equipped with three-cylinder engines. Among them, General Motors' brand is the biggest promoter of three-cylinder engines, and Chevrolet compact models are basically equipped with three-cylinder engines.

The three-cylinder engine can save energy and reduce emissions to a certain extent, and at the same time, it also has certain advantages in terms of manufacturing costs. However, its shortcomings are also obvious: shaking, noise, lack of power, especially the obvious shaking at the moment of starting the engine, which has led to a decline in the product power of Chevrolet's models.

The second is the confusion of generic positioning. In the U.S. market, the Chevrolet brand is actually not low-end, and its sales are higher than Buick's. However, in the Chinese market, GM has positioned Chevrolet for the low-end market, and the brand power between the two is quite different. Under the influence of the wave of price cuts, Buick also had to "exchange price for volume", which caused the "brothers" of the same door to squeeze each other's internal friction, and the Chevrolet, whose brand power was not as good as Buick, fell behind.

Another point is that Chevrolet is not paying enough attention to the new energy transition. Although it launched a prototype of the Chevrolet Volt concept car powered by hydrogen fuel cells as early as 2007, there is currently only one pure electric model in the domestic market, and it is not very competitive. According to the data of Chedi, in the first two months of this year, the sales volume of Changcun was only 169 vehicles.

Under various factors, Chevrolet has fallen far behind in China faster than expected, which in turn has dragged down GM's position in China. According to CNBC, GM's market share in China has plummeted from 14.9% in 2015 to 9.8% in 2022.

So it's not a surprise when the news comes out that SAIC-GM is considering a strategic realignment of the Chevrolet brand. According to a report by the Economic Observer, some internal employees said that Chevrolet Cruze and Malibu may be about to stop production because profits are too low, and as for the adjustment of brand development strategy, SAIC-GM may hold a communication meeting in April.

However, Cruze and Malibu are already considered to be the "sales responsibility" of Chevrolet, of which Cruze sales accounted for more than 80% of Chevrolet's total sales in the first two months of this year. It's hard to imagine how Chevrolet would pull up its already sluggish sales if the main model was adjusted.

3

Bet on SUV ●

Judging from the previous official information, SAIC-GM has not given up on Chevrolet at present, but the route has changed.

During the Guangzhou Auto Show in November last year, Zhou Peng, director of the Chevrolet Marketing Department of SAIC-GM, said that in the face of the strong rise of its own brands and the transformation of new tracks, Chevrolet is facing unprecedented challenges and difficulties. It's a challenge to tell the story of an American brand in China, but change will come next year (2024).

Zhou Peng revealed at the time that 2024 will be a breakthrough year for Chevrolet, and there are two aspects in the future: SUV and electrification. In 2024, Chevrolet will launch high-performance + multi-functional SUV full-scenario products covering large, medium, and compact SUVs, including pure electric SUVs with the Autonen platform, and PHEV plug-in hybrid SUVs with a new plug-in hybrid platform.

In addition, based on GM North America's deep experience in the SUV field, especially large SUVs, the company will introduce the original Chevrolet "big SUV" lineup this year. According to Lu Yi, deputy general manager of SAIC-GM, Chevrolet will become a personalized brand with SUV as its characteristic proposition in the future.

In this way, under the strategy of focusing on SUVs and electric vehicles, it is not impossible for the Cruze, which is positioned as a compact sedan, and Malibu, which is positioned as a mid-size sedan, to be "optimized" even if they are still the main sales force of the Chevrolet brand.

However, the current performance of Chevrolet SUV products in the Chinese market is not satisfactory. According to the data of Chedi, the best-selling mid-size SUV explorer sold only 383 and 139 units in January and February this year, followed by only 380 and 116 units respectively, while the average monthly sales of compact SUV Xingmilo and small SUV Chuangku this year are only double digits.

In addition, in terms of new energy, although Zhuang Jingxiong, general manager of SAIC-GM, said: "We rely on Buick this year (2023) to support the banner of the entire new energy, and next year (2024) we rely on Cadillac and Chevrolet to strive for the three brands to jointly support this banner." "However, in this area of Chevrolet the same foundation is poor.

As mentioned above, Chevrolet currently has only one pure electric model on sale in the domestic market, with a total of only 169 units sold in the first two months of this year. In this case, even if Chevrolet were to discontinue those models that could not make money and switch to SUVs and electrification, what were the chances of winning the market?

"China's Buick, the world's Chevrolet", I have to admit that Chevrolet is the pride of the United States, and it is the brand that has contributed the most to GM's sales in history, but in recent years, this 100-year-old brand has faltered in the Chinese market, and even with SAIC-GM has been "in pain".

Whether this year can be a breakthrough year for Chevrolet, and whether SAIC-GM's sales can stop falling and rebound, depends on the determination and effect of the next adjustment.

Author | Baiyuan

来源 | 车圈能见度（CarVisibility）